I have written at length about the coming collapse of Social Security as well as all of the defined benefit pension plans. If you are expecting to collect "what you are owed," pay attention before it is too late.
The numbers just do not work. In a few years there are going to be more people retiring than at any previous time in history. When you look at the Social Security Trust Fund you will immediately notice that there is no money in the fund. The government "borrows" that money to help meet current obligations. In a few years there will be no more money to borrow. The fund will be upside down. In other words, paying out more money than they take in.
Does that mean you will not get your money? No, but here is the kicker, the money you receive will be money that the government has created out of thin air by selling debt to the Federal Reserve system. We are already running the presses full speed ahead to pay for the huge budget shortfalls and trade debts that we have created and continue to create.
What happens when the government continues to create money? The purchasing power of the dollar continues to fall. It is falling right now. Have you noticed? Gasoline is higher, food is higher, medical insurance is higher; a lot of the things we consume on a regular basis are higher. Have all of those goods and services increased in value? No, the dollar has lost purchasing power.
How will you live on a pension of $2000 per month when gasoline hits $5.00 per gallon and medical insurance costs you $1000 per month? Let me help, you will not be able to survive on your pension alone. You will have to continue working. That is, unless your company out sources your job to India or China.
I got a letter from the Public Employees Retirement Association (PERA) the other day. It was from the top guy and the subject of his letter was to soothe the jitters about the financial stability of PERA. Right now PERA is in better shape than Social Security, but they are still projecting a $13 billion future shortfall that could grow based on the investment income of the fund.
Why not be up front with folks and tell them the painful truth about future benefits? Because they do not want current workers to cash out. They want to keep the game going as long as possible. After all, the folks who run these pension plans need jobs too.
For this reason, you must have a plan to take care of yourself when you reach retirement age. If you are going to quit working, you must have enough set aside to pay your monthly expenses and grow as the dollar declines. Do not depend upon your pension plan or the government to take care of you in your old age.
Friday, April 28, 2006
Friday, April 21, 2006
Depression II
Most economists of the Austrian school of thought will tell you in no uncertain terms that the massive manipulation of our country's currency will end badly. You cannot inflate forever and hope that things work themselves out.
For examples of what happens, look at the Wiemer Republic of Germany in 1923 and Argentina in the 1990's. In Germany the inflation of the supply of money got so bad that it took a 4.62 million marcs to buy just one U.S. dollar. In fact the collapse of their currency resulted in the collapse of the German government and allowed Adolph Hitler to toke over.
In Argentina during the 1990's, the government printed so many pesos that inflation raged at over 5000% per year. Prices for things like food, gas, and rent changed daily in an effort to keep up with the falling value of the peso.
How do we get to depression from hyperinflation? Simple, once prices go into orbit, demand falls. People get laid off and demand falls further. Companies close due to lack of demand and demand falls further. It becomes a downward spiral that cannot be stopped. It must run its course.
There are those who will tell you that Roosevelt's New Deal brought the country out of depression. The reality is that his social engineering caused the depression to last longer because he created false demand in parts of the economy and he created jobs and paid employees with fiat money. This caused the correction to last much longer.
Now fast forward to today. When depression II hits things will be much worse. First demographics are vastly different than they were in 1930. In 1930 80% of the population was agrarian. Most people lived on farms. Family farms were handled down from generation to generation and so were fully paid for. There was very little personal debt, as banks did not normally lend to average folks. When the depression hit, you found many multi-generational homes and you found farmers producing food for their families.
Today less than 5% of all families live on farms. We have become an urban society. So where will the food come from? Grocery stores typically have about 3 days worth of food on their shelves on any given day. When distributors close and the big chains start closing stores how will urban folks obtain food. There are city dwellers that do not know where hamburger comes from.
The incidents in Las Vegas with the "swarming attacks" by roving gangs provides a chilling look at what cities will be like during depression II. People with no food will roam city streets taking whatever they can find. The next depression will be far worse than the last.
Do not listen to government officials who tell you that they can prevent a reoccurrence of the Great Depression by market and currency manipulation. I mean look at how well they responded to the gulf coast after Katrina.
The fact is the government has very few weapons left in their arsenal for fighting such an economic battle and further manipulations only delay and worsens the problem.
Another key point is that a great deal of our manufacturing capability has been moved offshore. We can no longer build many of the things we use in our lives. This means that when financial crisis hits we will be at the mercy of our foreign trading partners who will demand gold or silver for payment, not our worthless paper.
Chilling isn't it?
For examples of what happens, look at the Wiemer Republic of Germany in 1923 and Argentina in the 1990's. In Germany the inflation of the supply of money got so bad that it took a 4.62 million marcs to buy just one U.S. dollar. In fact the collapse of their currency resulted in the collapse of the German government and allowed Adolph Hitler to toke over.
In Argentina during the 1990's, the government printed so many pesos that inflation raged at over 5000% per year. Prices for things like food, gas, and rent changed daily in an effort to keep up with the falling value of the peso.
How do we get to depression from hyperinflation? Simple, once prices go into orbit, demand falls. People get laid off and demand falls further. Companies close due to lack of demand and demand falls further. It becomes a downward spiral that cannot be stopped. It must run its course.
There are those who will tell you that Roosevelt's New Deal brought the country out of depression. The reality is that his social engineering caused the depression to last longer because he created false demand in parts of the economy and he created jobs and paid employees with fiat money. This caused the correction to last much longer.
Now fast forward to today. When depression II hits things will be much worse. First demographics are vastly different than they were in 1930. In 1930 80% of the population was agrarian. Most people lived on farms. Family farms were handled down from generation to generation and so were fully paid for. There was very little personal debt, as banks did not normally lend to average folks. When the depression hit, you found many multi-generational homes and you found farmers producing food for their families.
Today less than 5% of all families live on farms. We have become an urban society. So where will the food come from? Grocery stores typically have about 3 days worth of food on their shelves on any given day. When distributors close and the big chains start closing stores how will urban folks obtain food. There are city dwellers that do not know where hamburger comes from.
The incidents in Las Vegas with the "swarming attacks" by roving gangs provides a chilling look at what cities will be like during depression II. People with no food will roam city streets taking whatever they can find. The next depression will be far worse than the last.
Do not listen to government officials who tell you that they can prevent a reoccurrence of the Great Depression by market and currency manipulation. I mean look at how well they responded to the gulf coast after Katrina.
The fact is the government has very few weapons left in their arsenal for fighting such an economic battle and further manipulations only delay and worsens the problem.
Another key point is that a great deal of our manufacturing capability has been moved offshore. We can no longer build many of the things we use in our lives. This means that when financial crisis hits we will be at the mercy of our foreign trading partners who will demand gold or silver for payment, not our worthless paper.
Chilling isn't it?
Thursday, April 20, 2006
Jesus’ Government
Today I post for your reading enjoyment, an article by Joseph Sobran. He nails the Libertarian viewpoint firmly on the head in this article. His key comment occurs in the second paragraph…"Government is organized force." Libertarians are against organized government because there is no proof anywhere in history that government has made anything better by getting involved.
Libertarians are also against government because Libertarians subscribe to the Zero Aggression Principle, which states "No human being has the right -- under any circumstances -- to initiate force against another human being, nor to threaten or delegate its initiation."
With that in mind read and enjoy.
The Reactionary Utopian
April 4, 2006
JESUS' GOVERNMENT
by Joe Sobran
Not again! Another top Republican "denies any
wrongdoing," but resigns his post. As the great American
philosopher Jimmy Hatlo used to say, they'll do it every
time.
Why does corruption in government always surprise
us? Why do we expect anything else from it? Government is
organized force. It takes our wealth and makes war. And
we think honest men would do that work?
Well, honest men have sincerely tried, but look at
the results and ask yourself whether honesty has any
inherent tendency to prevail in politics. War, taxation,
waste, debt, inflation, hatred, hypocrisy, cynicism,
social disorder. And also -- amazingly enough! --
corruption.
As I often say, expecting government to produce good
results is like expecting a tiger to pull a plow. After
the twentieth century, in which the world's governments
killed hundreds of millions of their own subjects,
everyone ought to talk about the state the way Jews talk
about Hitler. Yet we still have high hopes for this
beast, because, after all, the mighty tiger is certainly
strong enough to pull that plow if he wanted to! If only.
Even most Christians believe in the state, though
Jesus never urged his followers to take political action.
A very devout and intelligent Catholic socialist friend
of mine argues that Jesus legitimized the state when he
said, "Render unto Caesar the things that are Caesar's,
and unto God the things that are God's."
But that's reading an awful lot into a few words.
Jesus wasn't preaching to his followers at that moment;
he certainly wasn't preaching statism, let alone the
authority of pagan emperors who claimed divinity and
demanded idolatry. No, he was retorting to a trick
question from his enemies, and he answered with a witty
tautology. It might have been taken to mean, "Give Caesar
everything he claims, and also give God his due." But it
could also mean, "Give Caesar nothing, and God
everything." Or it might mean something else; Jesus
didn't specify.
It was a brilliant ad lib. Jesus' enemies were
trying to bait him into endorsing either idolatry or
sedition, and he deftly sidestepped them with a sentence
the world still remembers. Not exactly a hearty vote of
confidence in those who wield power, it seems to me.
Government doesn't get much help from the Gospels.
Don't resist evil. Don't fret about tomorrow. Trust your
Father in heaven. The truth will make you free. He who
takes up the sword will die by the sword. This is not
advice our own Caesars are apt to take.
Jesus did exalt the publican, or tax collector, who
prayed, "Lord, have mercy on me, a sinner." Today's
publicans, of course, are called "public servants," and
they deny any wrongdoing. Or they have their lawyers deny
it for them. Maybe they also let their lawyers handle
their carefully worded orisons.
Again, Jesus never used force or the threat of
force, except, in a way, when he saw his Father's house
profaned. That was a special case, from which it's hard
to draw general conclusions, but he was acting on his own
authority, not acting politically. And he was defying
those in power, not supporting them.
In the end, the government murdered him. This fact
ought to count for something in any discussion of
temporal power. Maybe capital punishment is still
justified, even if mistakes are made now and then and the
Son of God is accidentally victimized. But I'd start with
that accident.
Jesus' mercy extends readily to the publican and the
centurion, but for our time the absence of political
rhetoric, or political "solutions" to human problems, is
one of the most striking things about the Gospels. The
state, taxation, and war are themselves assumed to be
perennial problems, and there isn't the faintest
suggestion that "democracy" could relieve them, or turn
them into blessings.
Right from the start, Jesus has been a
disappointment to anyone hoping for salvation through
politics. Many expected the Messiah to bring political
and military deliverance -- peace through strength, as it
were. Instead they got a fiery preacher of peace who
resisted the political temptation proffered by Satan, the
very temptation the whole world is still succumbing to.
"My government is not of this world." I think that's
a fair paraphrase of his words.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Read this column on-line at
"http://www.sobran.com/columns/2006/060404.shtml".
Copyright (c) 2006 by the Griffin Internet Syndicate,
www.griffnews.com. This column may not be published in
print or Internet publications without express permission
of Griffin Internet Syndicate. You may forward it to
interested individuals if you use this entire page,
including the following disclaimer:
"SOBRAN'S and Joe Sobran's columns are available
by subscription. For details and samples, see
http://www.sobran.com/e-mail.shtml, write
PR@griffnews.com, or call 800-513-5053."
Libertarians are also against government because Libertarians subscribe to the Zero Aggression Principle, which states "No human being has the right -- under any circumstances -- to initiate force against another human being, nor to threaten or delegate its initiation."
With that in mind read and enjoy.
The Reactionary Utopian
April 4, 2006
JESUS' GOVERNMENT
by Joe Sobran
Not again! Another top Republican "denies any
wrongdoing," but resigns his post. As the great American
philosopher Jimmy Hatlo used to say, they'll do it every
time.
Why does corruption in government always surprise
us? Why do we expect anything else from it? Government is
organized force. It takes our wealth and makes war. And
we think honest men would do that work?
Well, honest men have sincerely tried, but look at
the results and ask yourself whether honesty has any
inherent tendency to prevail in politics. War, taxation,
waste, debt, inflation, hatred, hypocrisy, cynicism,
social disorder. And also -- amazingly enough! --
corruption.
As I often say, expecting government to produce good
results is like expecting a tiger to pull a plow. After
the twentieth century, in which the world's governments
killed hundreds of millions of their own subjects,
everyone ought to talk about the state the way Jews talk
about Hitler. Yet we still have high hopes for this
beast, because, after all, the mighty tiger is certainly
strong enough to pull that plow if he wanted to! If only.
Even most Christians believe in the state, though
Jesus never urged his followers to take political action.
A very devout and intelligent Catholic socialist friend
of mine argues that Jesus legitimized the state when he
said, "Render unto Caesar the things that are Caesar's,
and unto God the things that are God's."
But that's reading an awful lot into a few words.
Jesus wasn't preaching to his followers at that moment;
he certainly wasn't preaching statism, let alone the
authority of pagan emperors who claimed divinity and
demanded idolatry. No, he was retorting to a trick
question from his enemies, and he answered with a witty
tautology. It might have been taken to mean, "Give Caesar
everything he claims, and also give God his due." But it
could also mean, "Give Caesar nothing, and God
everything." Or it might mean something else; Jesus
didn't specify.
It was a brilliant ad lib. Jesus' enemies were
trying to bait him into endorsing either idolatry or
sedition, and he deftly sidestepped them with a sentence
the world still remembers. Not exactly a hearty vote of
confidence in those who wield power, it seems to me.
Government doesn't get much help from the Gospels.
Don't resist evil. Don't fret about tomorrow. Trust your
Father in heaven. The truth will make you free. He who
takes up the sword will die by the sword. This is not
advice our own Caesars are apt to take.
Jesus did exalt the publican, or tax collector, who
prayed, "Lord, have mercy on me, a sinner." Today's
publicans, of course, are called "public servants," and
they deny any wrongdoing. Or they have their lawyers deny
it for them. Maybe they also let their lawyers handle
their carefully worded orisons.
Again, Jesus never used force or the threat of
force, except, in a way, when he saw his Father's house
profaned. That was a special case, from which it's hard
to draw general conclusions, but he was acting on his own
authority, not acting politically. And he was defying
those in power, not supporting them.
In the end, the government murdered him. This fact
ought to count for something in any discussion of
temporal power. Maybe capital punishment is still
justified, even if mistakes are made now and then and the
Son of God is accidentally victimized. But I'd start with
that accident.
Jesus' mercy extends readily to the publican and the
centurion, but for our time the absence of political
rhetoric, or political "solutions" to human problems, is
one of the most striking things about the Gospels. The
state, taxation, and war are themselves assumed to be
perennial problems, and there isn't the faintest
suggestion that "democracy" could relieve them, or turn
them into blessings.
Right from the start, Jesus has been a
disappointment to anyone hoping for salvation through
politics. Many expected the Messiah to bring political
and military deliverance -- peace through strength, as it
were. Instead they got a fiery preacher of peace who
resisted the political temptation proffered by Satan, the
very temptation the whole world is still succumbing to.
"My government is not of this world." I think that's
a fair paraphrase of his words.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Read this column on-line at
"http://www.sobran.com/columns/2006/060404.shtml".
Copyright (c) 2006 by the Griffin Internet Syndicate,
www.griffnews.com. This column may not be published in
print or Internet publications without express permission
of Griffin Internet Syndicate. You may forward it to
interested individuals if you use this entire page,
including the following disclaimer:
"SOBRAN'S and Joe Sobran's columns are available
by subscription. For details and samples, see
http://www.sobran.com/e-mail.shtml, write
PR@griffnews.com, or call 800-513-5053."
Wednesday, April 19, 2006
Inflation Up, Gold and Silver Up, Dollar Down
Actually this morning the dollar is up a tad, but that is a temporary situation. The wonderful government announced this morning that inflation as measured by the CPI was up .6% for March. If you do some quick math, you will find that pencils out to around 7.2% on an annual basis. If you read the whole report published here, you will notice that way down in the report they speak of the old weights for calculating the CPI versus the new weights. Under the old method the monthly number comes in at around .7% which works out to a 8.4% annual rate.
What does this mean? It means that as the Federal Reserve continues to increase the money supply, the purchasing power of the dollar is going to continue to drop. That means the price of just about everything we buy will continue to rise. If you add to this any of several tipping points that I talked about back in January, it could get much worse. Word on the street is that China is sending the U.S. a strong message not to mess with Iran as China is trying to get Iran a membership into the Asian Bloc.
If China takes the teat away from the U.S. consumer, things really get interesting. With no other countries stepping up to buy U.S. debt, the dollar tanks and almost everything we buy goes up big time.
Take a moment and figure inflation into your current situation. It looks like it will be around for the foreseeable future. With careful planning you can weather the inflation storm.
What does this mean? It means that as the Federal Reserve continues to increase the money supply, the purchasing power of the dollar is going to continue to drop. That means the price of just about everything we buy will continue to rise. If you add to this any of several tipping points that I talked about back in January, it could get much worse. Word on the street is that China is sending the U.S. a strong message not to mess with Iran as China is trying to get Iran a membership into the Asian Bloc.
If China takes the teat away from the U.S. consumer, things really get interesting. With no other countries stepping up to buy U.S. debt, the dollar tanks and almost everything we buy goes up big time.
Take a moment and figure inflation into your current situation. It looks like it will be around for the foreseeable future. With careful planning you can weather the inflation storm.
Tuesday, April 18, 2006
The frightening truth of why Iran wants a bomb
Part of our problem in understanding what is going on in the Middle East is the fact that their culture is so different from ours. With that in mind and all of the recent talk of military action against Iran, I present an article published Sunday in the Telegraph.
The author has a wonderful grasp of the Middle Eastern mindset.
The frightening truth of why Iran wants a bomb
By Amir Taheri
(Filed: 16/04/2006)
Last Monday, just before he announced that Iran had gatecrashed "the nuclear club", President Mahmoud Ahmadinejad disappeared for several hours. He was having a khalvat (tête-à-tête) with the Hidden Imam, the 12th and last of the imams of Shiism who went into "grand occultation" in 941.
According to Shia lore, the Imam is a messianic figure who, although in hiding, remains the true Sovereign of the World. In every generation, the Imam chooses 36 men, (and, for obvious reasons, no women) naming them the owtad or "nails", whose presence, hammered into mankind's existence, prevents the universe from "falling off". Although the "nails" are not known to common mortals, it is, at times, possible to identify one thanks to his deeds. It is on that basis that some of Ahmad-inejad's more passionate admirers insist that he is a "nail", a claim he has not discouraged. For example, he has claimed that last September, as he addressed the United Nations' General Assembly in New York, the "Hidden Imam drenched the place in a sweet light".
Last year, it was after another khalvat that Ahmadinejad announced his intention to stand for president. Now, he boasts that the Imam gave him the presidency for a single task: provoking a "clash of civilisations" in which the Muslim world, led by Iran, takes on the "infidel" West, led by the United States, and defeats it in a slow but prolonged contest that, in military jargon, sounds like a low intensity, asymmetrical war.
In Ahmadinejad's analysis, the rising Islamic "superpower" has decisive advantages over the infidel. Islam has four times as many young men of fighting age as the West, with its ageing populations. Hundreds of millions of Muslim "ghazis" (holy raiders) are keen to become martyrs while the infidel youths, loving life and fearing death, hate to fight. Islam also has four-fifths of the world's oil reserves, and so controls the lifeblood of the infidel. More importantly, the US, the only infidel power still capable of fighting, is hated by most other nations.
According to this analysis, spelled out in commentaries by Ahmadinejad's strategic guru, Hassan Abassi, known as the "Dr Kissinger of Islam", President George W Bush is an aberration, an exception to a rule under which all American presidents since Truman, when faced with serious setbacks abroad, have "run away". Iran's current strategy, therefore, is to wait Bush out. And that, by "divine coincidence", corresponds to the time Iran needs to develop its nuclear arsenal, thus matching the only advantage that the infidel enjoys.
Moments after Ahmadinejad announced "the atomic miracle", the head of the Iranian nuclear project, Ghulamreza Aghazadeh, unveiled plans for manufacturing 54,000 centrifuges, to enrich enough uranium for hundreds of nuclear warheads. "We are going into mass production," he boasted.
The Iranian plan is simple: playing the diplomatic game for another two years until Bush becomes a "lame-duck", unable to take military action against the mullahs, while continuing to develop nuclear weapons.
Thus do not be surprised if, by the end of the 12 days still left of the United Nations' Security Council "deadline", Ahmadinejad announces a "temporary suspension" of uranium enrichment as a "confidence building measure". Also, don't be surprised if some time in June he agrees to ask the Majlis (the Islamic parliament) to consider signing the additional protocols of the Nuclear Non-proliferation Treaty (NPT).
Such manoeuvres would allow the International Atomic Energy Agency (IAEA) director, Muhammad El-Baradei, and Britain's Foreign Secretary, Jack Straw, to congratulate Iran for its "positive gestures" and denounce talk of sanctions, let alone military action. The confidence building measures would never amount to anything, but their announcement would be enough to prevent the G8 summit, hosted by Russia in July, from moving against Iran.
While waiting Bush out, the Islamic Republic is intent on doing all it can to consolidate its gains in the region. Regime changes in Kabul and Baghdad have altered the status quo in the Middle East. While Bush is determined to create a Middle East that is democratic and pro-Western, Ahmadinejad is equally determined that the region should remain Islamic but pro-Iranian. Iran is now the strongest presence in Afghanistan and Iraq, after the US. It has turned Syria and Lebanon into its outer defences, which means that, for the first time since the 7th century, Iran is militarily present on the coast of the Mediterranean. In a massive political jamboree in Teheran last week, Ahmadinejad also assumed control of the "Jerusalem Cause", which includes annihilating Israel "in one storm", while launching a take-over bid for the cash-starved Hamas government in the West Bank and Gaza.
Ahmadinejad has also reactivated Iran's network of Shia organisations in Bahrain, Kuwait, Saudi Arabia, Pakistan and Yemen, while resuming contact with Sunni fundamentalist groups in Turkey, Egypt, Algeria and Morocco. From childhood, Shia boys are told to cultivate two qualities. The first is entezar, the capacity patiently to wait for the Imam to return. The second is taajil, the actions needed to hasten the return. For the Imam's return will coincide with an apocalyptic battle between the forces of evil and righteousness, with evil ultimately routed. If the infidel loses its nuclear advantage, it could be worn down in a long, low-intensity war at the end of which surrender to Islam would appear the least bad of options. And that could be a signal for the Imam to reappear.
At the same time, not to forget the task of hastening the Mahdi's second coming, Ahamdinejad will pursue his provocations. On Monday, he was as candid as ever: "To those who are angry with us, we have one thing to say: be angry until you die of anger!"
His adviser, Hassan Abassi, is rather more eloquent. "The Americans are impatient," he says, "at the first sight of a setback, they run away. We, however, know how to be patient. We have been weaving carpets for thousands of years."
• Amir Taheri is a former Executive Editor of Kayhan, Iran's largest daily newspaper, but now lives in Europe
Information appearing on telegraph.co.uk is the copyright of Telegraph Group Limited and must not be reproduced in any medium without licence. For the full copyright statement see Copyright
The author has a wonderful grasp of the Middle Eastern mindset.
The frightening truth of why Iran wants a bomb
By Amir Taheri
(Filed: 16/04/2006)
Last Monday, just before he announced that Iran had gatecrashed "the nuclear club", President Mahmoud Ahmadinejad disappeared for several hours. He was having a khalvat (tête-à-tête) with the Hidden Imam, the 12th and last of the imams of Shiism who went into "grand occultation" in 941.
According to Shia lore, the Imam is a messianic figure who, although in hiding, remains the true Sovereign of the World. In every generation, the Imam chooses 36 men, (and, for obvious reasons, no women) naming them the owtad or "nails", whose presence, hammered into mankind's existence, prevents the universe from "falling off". Although the "nails" are not known to common mortals, it is, at times, possible to identify one thanks to his deeds. It is on that basis that some of Ahmad-inejad's more passionate admirers insist that he is a "nail", a claim he has not discouraged. For example, he has claimed that last September, as he addressed the United Nations' General Assembly in New York, the "Hidden Imam drenched the place in a sweet light".
Last year, it was after another khalvat that Ahmadinejad announced his intention to stand for president. Now, he boasts that the Imam gave him the presidency for a single task: provoking a "clash of civilisations" in which the Muslim world, led by Iran, takes on the "infidel" West, led by the United States, and defeats it in a slow but prolonged contest that, in military jargon, sounds like a low intensity, asymmetrical war.
In Ahmadinejad's analysis, the rising Islamic "superpower" has decisive advantages over the infidel. Islam has four times as many young men of fighting age as the West, with its ageing populations. Hundreds of millions of Muslim "ghazis" (holy raiders) are keen to become martyrs while the infidel youths, loving life and fearing death, hate to fight. Islam also has four-fifths of the world's oil reserves, and so controls the lifeblood of the infidel. More importantly, the US, the only infidel power still capable of fighting, is hated by most other nations.
According to this analysis, spelled out in commentaries by Ahmadinejad's strategic guru, Hassan Abassi, known as the "Dr Kissinger of Islam", President George W Bush is an aberration, an exception to a rule under which all American presidents since Truman, when faced with serious setbacks abroad, have "run away". Iran's current strategy, therefore, is to wait Bush out. And that, by "divine coincidence", corresponds to the time Iran needs to develop its nuclear arsenal, thus matching the only advantage that the infidel enjoys.
Moments after Ahmadinejad announced "the atomic miracle", the head of the Iranian nuclear project, Ghulamreza Aghazadeh, unveiled plans for manufacturing 54,000 centrifuges, to enrich enough uranium for hundreds of nuclear warheads. "We are going into mass production," he boasted.
The Iranian plan is simple: playing the diplomatic game for another two years until Bush becomes a "lame-duck", unable to take military action against the mullahs, while continuing to develop nuclear weapons.
Thus do not be surprised if, by the end of the 12 days still left of the United Nations' Security Council "deadline", Ahmadinejad announces a "temporary suspension" of uranium enrichment as a "confidence building measure". Also, don't be surprised if some time in June he agrees to ask the Majlis (the Islamic parliament) to consider signing the additional protocols of the Nuclear Non-proliferation Treaty (NPT).
Such manoeuvres would allow the International Atomic Energy Agency (IAEA) director, Muhammad El-Baradei, and Britain's Foreign Secretary, Jack Straw, to congratulate Iran for its "positive gestures" and denounce talk of sanctions, let alone military action. The confidence building measures would never amount to anything, but their announcement would be enough to prevent the G8 summit, hosted by Russia in July, from moving against Iran.
While waiting Bush out, the Islamic Republic is intent on doing all it can to consolidate its gains in the region. Regime changes in Kabul and Baghdad have altered the status quo in the Middle East. While Bush is determined to create a Middle East that is democratic and pro-Western, Ahmadinejad is equally determined that the region should remain Islamic but pro-Iranian. Iran is now the strongest presence in Afghanistan and Iraq, after the US. It has turned Syria and Lebanon into its outer defences, which means that, for the first time since the 7th century, Iran is militarily present on the coast of the Mediterranean. In a massive political jamboree in Teheran last week, Ahmadinejad also assumed control of the "Jerusalem Cause", which includes annihilating Israel "in one storm", while launching a take-over bid for the cash-starved Hamas government in the West Bank and Gaza.
Ahmadinejad has also reactivated Iran's network of Shia organisations in Bahrain, Kuwait, Saudi Arabia, Pakistan and Yemen, while resuming contact with Sunni fundamentalist groups in Turkey, Egypt, Algeria and Morocco. From childhood, Shia boys are told to cultivate two qualities. The first is entezar, the capacity patiently to wait for the Imam to return. The second is taajil, the actions needed to hasten the return. For the Imam's return will coincide with an apocalyptic battle between the forces of evil and righteousness, with evil ultimately routed. If the infidel loses its nuclear advantage, it could be worn down in a long, low-intensity war at the end of which surrender to Islam would appear the least bad of options. And that could be a signal for the Imam to reappear.
At the same time, not to forget the task of hastening the Mahdi's second coming, Ahamdinejad will pursue his provocations. On Monday, he was as candid as ever: "To those who are angry with us, we have one thing to say: be angry until you die of anger!"
His adviser, Hassan Abassi, is rather more eloquent. "The Americans are impatient," he says, "at the first sight of a setback, they run away. We, however, know how to be patient. We have been weaving carpets for thousands of years."
• Amir Taheri is a former Executive Editor of Kayhan, Iran's largest daily newspaper, but now lives in Europe
Information appearing on telegraph.co.uk is the copyright of Telegraph Group Limited and must not be reproduced in any medium without licence. For the full copyright statement see Copyright
Monday, April 17, 2006
Gold, I Told You So
Today gold broke the $600 barrier. I am sure that we will hear the usual suspects come out of the woodwork downplaying the move, saying that gold is overbought, it is a relic, it is time for a correction. They will try to talk down the price of gold. We may even see some of the large banks selling gold in an effort to bring the price down.
All of this may work…for a while, but the bottom line is that gold is nowhere near done with the up move. How do I know? The U.S. government continues to create more and more dollars, diluting the dollar's buying power.
The first time I mentioned owning precious metals here was back on April 5, 2005, over a year ago. At that time gold was selling for around $427 per ounce and silver was selling for $6.95 per ounce.
The first time I specifically mentioned owning gold in any of a number of ways was on October 25, 2005. Back in October, gold was selling for about $470 per ounce.
Did you buy any? Most people did not. It is almost impossible to buy gold through your 401K plan, unless you have a more progressive plan that offers a precious metals fund. Most folks do not want to be bothered with actually buying gold and then trying to figure out a way to store it. Of course those same folks have no problem buying a new SUV and figuring out where they are going to store it. Today gold is selling for $606 per ounce and silver for better than $13 per ounce.
Let's use the SUV example and do a simple comparison. Let's say you bought a brand new SUV in April of last year and it cost you $45,000. Let's say you paid cash and have no payments. I know that for 99% of the population that is impossible as most of us have absolutely no savings, but for the sake of comparison let's say you paid cash.
Today, that same SUV is worth maybe $36,000 at the most and probably less with gas on the rise again. Had you purchased gold instead where you would be today?
Gold was at $427 an ounce in April so you could have purchased about 105 ounces. I am not going to consider any kind of handling charges you might have incurred because you probably paid sales tax and licensing on your new SUV well in excess of the purchase price.
Today as I write this your 105 ounces of gold is worth about $63,630. Your gold would be worth almost twice as much as your SUV in just one year. Now I know you what you're thinking, "How do I drive gold?" True, while you cannot drive gold, you could sell part of your gold holdings, purchase a very nice two-year-old SUV, and still have your original $45,000 left invested in gold and growing.
The fact is if gold just gets back to its original high of $850 an ounce, your $45,000 will once again grow to over $63,000. If gold goes higher as I believe it will, well, the sky is the limit isn't it?
Do not think that just because gold has already gone up in price by 42% over the past year that it is too late. Grab some today either by purchasing it outright, buying the gold ETF (GLD), or buying unhedged gold stocks.
All of this may work…for a while, but the bottom line is that gold is nowhere near done with the up move. How do I know? The U.S. government continues to create more and more dollars, diluting the dollar's buying power.
The first time I mentioned owning precious metals here was back on April 5, 2005, over a year ago. At that time gold was selling for around $427 per ounce and silver was selling for $6.95 per ounce.
The first time I specifically mentioned owning gold in any of a number of ways was on October 25, 2005. Back in October, gold was selling for about $470 per ounce.
Did you buy any? Most people did not. It is almost impossible to buy gold through your 401K plan, unless you have a more progressive plan that offers a precious metals fund. Most folks do not want to be bothered with actually buying gold and then trying to figure out a way to store it. Of course those same folks have no problem buying a new SUV and figuring out where they are going to store it. Today gold is selling for $606 per ounce and silver for better than $13 per ounce.
Let's use the SUV example and do a simple comparison. Let's say you bought a brand new SUV in April of last year and it cost you $45,000. Let's say you paid cash and have no payments. I know that for 99% of the population that is impossible as most of us have absolutely no savings, but for the sake of comparison let's say you paid cash.
Today, that same SUV is worth maybe $36,000 at the most and probably less with gas on the rise again. Had you purchased gold instead where you would be today?
Gold was at $427 an ounce in April so you could have purchased about 105 ounces. I am not going to consider any kind of handling charges you might have incurred because you probably paid sales tax and licensing on your new SUV well in excess of the purchase price.
Today as I write this your 105 ounces of gold is worth about $63,630. Your gold would be worth almost twice as much as your SUV in just one year. Now I know you what you're thinking, "How do I drive gold?" True, while you cannot drive gold, you could sell part of your gold holdings, purchase a very nice two-year-old SUV, and still have your original $45,000 left invested in gold and growing.
The fact is if gold just gets back to its original high of $850 an ounce, your $45,000 will once again grow to over $63,000. If gold goes higher as I believe it will, well, the sky is the limit isn't it?
Do not think that just because gold has already gone up in price by 42% over the past year that it is too late. Grab some today either by purchasing it outright, buying the gold ETF (GLD), or buying unhedged gold stocks.
Wednesday, April 12, 2006
Are We All Sheep?
I ask this question because as I look around at the kind folks that I work with, no one seems to care about what is going on in the world. No one cares that Iran just hit another milestone in the uranium enrichment process. No one cares that the war in Iraq, which we were duped into, has devolved into a civil war. No one cares that the government increased the debt ceiling to $9 trillion. No one cares about our monthly trade deficit. No one cares that every year we become poorer because our currency is being devalued at a faster rate than our rate of increase in income. My wife, bless her heart, doesn't want to know and I have a feeling that is the opinion of most people.
Why don't we care? Because we are just too busy living life. We have jobs that require more and more of our time. We have huge mortgages and consumer loans to make payments on. We have kids that require more and more of our time…and money. We no longer have time for ourselves, time to think, time to read, or time for good conversation with spouses and friends.
Take, for example, this statistic published by our esteemed government yesterday. Our monthly trade deficit improved to $65.7 billion. Improved? $65.7 million in the red? How is that an improvement? Well friends, January's deficit came in at $68.6 billion. See the improvement? Trouble is the improvement really doesn't exist. Let's break this down to a daily deficit and see if the picture clears a little for us. January deficit is $68.6 billion divided by 31 days equals $2.2129 billion per day. Wow that's a lot of money. Now look at February's numbers…$65.7 divided by only 28 days equals $2.3464 billion per day. Now I ask you, does that look like an improvement to you? Hardly.
This deficit, for those of you that may be wondering, has to be financed. The U.S. borrows this money from our suppliers, China and Japan, who by the way, reported record trade surpluses for the month of February. If we did not continue to borrow the money back from our suppliers, we would literally run out of money. There would be no money anywhere for anything, so we spend it in China and then turn around and borrow it back so we can play the same game next month. Fun eh?
So who cares? Well, not many people, that's for sure. Like I said earlier, everyone is too busy living their lives to worry about something as ridiculous as the trade deficit. But some day the population will care. When prices for the things we buy everyday at Wally World goes through the roof and the price of gasoline goes through the roof and all of these nice countries who sell us things cheap and then loan us our money back stop playing this game people will awaken from their dream. The dream was nice but reality will be a nightmare.
Only a few people in this once-great country will be prepared for the hardships that are just around the corner. Everyone else will suffer. Think Great Depression II.
Why don't we care? Because we are just too busy living life. We have jobs that require more and more of our time. We have huge mortgages and consumer loans to make payments on. We have kids that require more and more of our time…and money. We no longer have time for ourselves, time to think, time to read, or time for good conversation with spouses and friends.
Take, for example, this statistic published by our esteemed government yesterday. Our monthly trade deficit improved to $65.7 billion. Improved? $65.7 million in the red? How is that an improvement? Well friends, January's deficit came in at $68.6 billion. See the improvement? Trouble is the improvement really doesn't exist. Let's break this down to a daily deficit and see if the picture clears a little for us. January deficit is $68.6 billion divided by 31 days equals $2.2129 billion per day. Wow that's a lot of money. Now look at February's numbers…$65.7 divided by only 28 days equals $2.3464 billion per day. Now I ask you, does that look like an improvement to you? Hardly.
This deficit, for those of you that may be wondering, has to be financed. The U.S. borrows this money from our suppliers, China and Japan, who by the way, reported record trade surpluses for the month of February. If we did not continue to borrow the money back from our suppliers, we would literally run out of money. There would be no money anywhere for anything, so we spend it in China and then turn around and borrow it back so we can play the same game next month. Fun eh?
So who cares? Well, not many people, that's for sure. Like I said earlier, everyone is too busy living their lives to worry about something as ridiculous as the trade deficit. But some day the population will care. When prices for the things we buy everyday at Wally World goes through the roof and the price of gasoline goes through the roof and all of these nice countries who sell us things cheap and then loan us our money back stop playing this game people will awaken from their dream. The dream was nice but reality will be a nightmare.
Only a few people in this once-great country will be prepared for the hardships that are just around the corner. Everyone else will suffer. Think Great Depression II.
Tuesday, April 11, 2006
Shortsighted Immigration Policy
No doubt you have read or heard all of the reports surrounding the legislation regarding immigration. It has resulted in mass demonstrations around the country. As is typically the case, our government is trying to fix what they perceive to be a problem; mass illegal immigration from Mexico.
In a nutshell, the new law would make it a felony to be in this country illegally. The bill, which passed in the House, also calls for the construction of 700 miles of fence along our southern border.
To be honest, there are issues that need to be dealt with, but passing a law is not the answer. Passing another law has never solved any problem in this country, but that is the government's answer to everything.
Besides, if we look at some demographics of our population, we just may come to the conclusion that keeping immigrants out of this country is not the long-term answer to our future problems.
We Will Not Be Able to Retire
We have talked about this subject in past postings, but always from a financial point of view. If you haven't saved enough money, you will not be able to retire. You cannot depend on any type of defined benefit pension plan, nor can you depend on Social Security.
Today however, we are looking at this from a demographic point of view. It all begins with the national birth rate and our life expectancy. Back in the early 1900's when someone in government decided that we needed some type of national old age pension, the life expectancy of the average American male was 57. Since the retirement age was 65, hardly anyone ever collected benefits. Now life expectancy is in the mid 70's for men and 80 for women.
The birth rate per 1000 people in 1913 was 29.8. It has fallen steadily and in 2002 stood at 13.9 per 1000. What does all of this mean? In the next several years as the baby boomers start retiring in mass, there will not be enough people of working age to do all of the jobs and provide all of the services that we retirees will demand. There will soon be only 1.5 workers for every retiree and it will take everything these workers produce to provide enough goods and services to meet the needs of the retirees. Forget for a moment what this means for anyone expecting to collect Social Security benefits. We are talking here about being able to shop at Wal-Mart, eat out at restaurants, and get medical care.
Now this will not happen overnight, but will play out over the coming decades. If we consider simple supply/demand relationships one of two things have to happen. Either the price for goods and services will rise (low supply, high demand = higher prices) or there will be less goods and services available for consumption.
There is one other possible solution; the U.S. begins an aggressive immigration plan. This does not mean that we need to limit immigration but rather increase it and dramatically so. Right now the U.S. is allowing about one million people to immigrate to the U.S. At the height of the boomer retirement years, we will have to increase those numbers to four million per year. That is just to fill the vacancies created by retirees.
So you see, all of this talk about limiting immigration is very shortsighted of us. Instead of looking for ways to limit the number of immigrants coming to this country, we instead need to be looking for ways to attract immigrants into the U.S. Either that or we will be working well into our 70's or beyond.
In a nutshell, the new law would make it a felony to be in this country illegally. The bill, which passed in the House, also calls for the construction of 700 miles of fence along our southern border.
To be honest, there are issues that need to be dealt with, but passing a law is not the answer. Passing another law has never solved any problem in this country, but that is the government's answer to everything.
Besides, if we look at some demographics of our population, we just may come to the conclusion that keeping immigrants out of this country is not the long-term answer to our future problems.
We Will Not Be Able to Retire
We have talked about this subject in past postings, but always from a financial point of view. If you haven't saved enough money, you will not be able to retire. You cannot depend on any type of defined benefit pension plan, nor can you depend on Social Security.
Today however, we are looking at this from a demographic point of view. It all begins with the national birth rate and our life expectancy. Back in the early 1900's when someone in government decided that we needed some type of national old age pension, the life expectancy of the average American male was 57. Since the retirement age was 65, hardly anyone ever collected benefits. Now life expectancy is in the mid 70's for men and 80 for women.
The birth rate per 1000 people in 1913 was 29.8. It has fallen steadily and in 2002 stood at 13.9 per 1000. What does all of this mean? In the next several years as the baby boomers start retiring in mass, there will not be enough people of working age to do all of the jobs and provide all of the services that we retirees will demand. There will soon be only 1.5 workers for every retiree and it will take everything these workers produce to provide enough goods and services to meet the needs of the retirees. Forget for a moment what this means for anyone expecting to collect Social Security benefits. We are talking here about being able to shop at Wal-Mart, eat out at restaurants, and get medical care.
Now this will not happen overnight, but will play out over the coming decades. If we consider simple supply/demand relationships one of two things have to happen. Either the price for goods and services will rise (low supply, high demand = higher prices) or there will be less goods and services available for consumption.
There is one other possible solution; the U.S. begins an aggressive immigration plan. This does not mean that we need to limit immigration but rather increase it and dramatically so. Right now the U.S. is allowing about one million people to immigrate to the U.S. At the height of the boomer retirement years, we will have to increase those numbers to four million per year. That is just to fill the vacancies created by retirees.
So you see, all of this talk about limiting immigration is very shortsighted of us. Instead of looking for ways to limit the number of immigrants coming to this country, we instead need to be looking for ways to attract immigrants into the U.S. Either that or we will be working well into our 70's or beyond.
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